Our retail research team has created 3 stock lists, namely Growth, Value and Yield.
|The Growth List comprises of small-mid capitalisation companies with business catalysts which will potentially grow their earnings in the near future. The Growth portfolio would be suitable for investors looking for higher returns and are willing to tolerate the risk of higher short-term volatility of stock prices.|
|The Value List focuses on companies which are undervalued based on their share prices as compared to the company fundamentals. It would be suitable for conservative investors who prefer price stability and have a longer investment horizon.|
|The Yield List comprises of stocks that provide consistent dividend pay-out. It would be suitable for investors whose primary focus is to gain regular dividend income from their investments.|
November Market Overview
The Singapore market edged up 3% m/m in Nov, which has responded positively after Fed chairman Jerome Powell softened his stance on interest rate hikes in 2019. Notably, gains in banking and real estate stocks more than offset the losses among commodities, industrial and transport counters.
Among the STI component stocks, the top performers were Jardine Matheson (+13.7%), Jardine Strategic (+12.6%), Jardine C&C (+12.1%), HongKong Land (+8.4%), GentingS’pore (+6.9%), while ComfortDelgro (-7.6%), Sembcorp Industries (-6.9%) and SATS (-3.7%) lagged behind the market.
Ytd, the STI slumped 8.4% (Oct: -11.3%) and suffered a total loss of 5.2% (Oct: -8.2%), even after including dividends. On an equal weighted basis, the average decline of STI constituents was 8.8% (Oct -11.0%), with only 9 out of 30 stocks generating positive returns.
Against this backdrop, Market Insight’s Growth, Value, Yield (GVY) basket of stocks narrowed its losses by 1.7ppt in Nov to yield an average ytd loss of 3.1%. Nevertheless, it still managed to outperform the STI by 2.1ppt.
Growth List -0.5% YTD
The average total return of the Growth portfolio stayed in the red for the second time this year as technology stocks remain under pressure, but partly offset by the strong rebound in China Sunsine after its 3Q18 earnings smashed estimates.
We removed Valuetronics from our Growth basket on worries over supply chain disruptions as management warned that heightened trade tensions could have an adverse impact on its business (about 20% of its revenue, up from the 10% figure it guided in 1QFY19).
Value List -3.1% YTD
Value portfolio trimmed its losses (+1.5ppt) as GentingS’pore’sbetter-than-expected 3Q18 results led to share price recovery.
However, overall performance was still dragged by earlier losses in divested stocks.
Yield List -6.8% YTD
The Yield portfolio was mainly weighed down by Asian Pay TV (-22ppt) following a drastic cut in its DPU guidance for the next two years even though the operating performance of the Taiwan cable TV operator did not entirely come as a surprise.
We added NetLink NBN Trust to the Yield basket, underpinned by a captive market and stream of sustainable cash flows to support its DPU payout. The fibre broadband monopoly is also set to benefit from StarHub’s recent decision to pull out of cable infrastructure.
Note: * Including dividends
** Priced in USD
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This document is being distributed for general information only and it does not constitute an offer, recommendation or solicitation to enter into any transaction or adopt any hedging, trading or investment strategy, in relation to any securities or other financial instruments. This document is for general evaluation only, it does not take into account the specific investment objectives, financial situation or particular needs of any particular person or class of persons and it has not been prepared for any particular person or class of persons.
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